Lauren G – PURE SAD DADS
I found this on here last week, like a day before I took the exam. Saved me on at least 4 questions. The below is copied from the original post but I did not copy the original author's name.
P = Price variance
U = Usage variance
R = Rate variance
E = Efficiency variance
Standard less Actual = Difference (SAD)
For the SAD mnemonic a positive difference is good and a negative difference is bad (ie standard price is greater than actual means you saved money, hence a positive number is a good variance).
DA = Difference times Actual
DS = Difference times Standard
You line up the PURE and DADS/DADS nmemonics together as such:
P=DA
U=DS
R=DA
E=DS
For each one you are going to do the SAD mnemonic for the item you are working on and multiply it by either the Actual or Standard (DA vs DS to figure out which).
Price Variance: [Standard Price less Actual Price = Difference] Take that Difference and multiply it by the Actual Usage (P=D x A)
Usage Variance = [Standard Usage less Actual Usage = Difference] Take that Difference and multiply it by the Standard Price (U = D x S)
The P & U are the material variances
Rate Variance = [Standard Rate less Actual Rate = Difference] Take that Difference and multiply it by the Actual Efficiency (R = D x A)
Efficiency Variance = [Standard Efficiency less Actual Efficiency = Difference] Take that Difference and multiply it by the Standard Rate
The R & E are the labor variances.
When you line the above up you get:
P = DA
U = DS
R = DA
E = DS
.